EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0917926
Customs Act 1901
Background
Part XVA of the Customs Act 1901 (the Act) sets out a scheme under which Tariff Concession Orders (TCOs) may be made by the Chief Executive Officer of Customs (the CEO). A lower rate of customs duty applies to goods that are the subject of a TCO.
Under section 269F of the Act, a person may apply to the CEO for a TCO in respect of goods. If the CEO is satisfied that the application is not in respect of goods specified in section 269SJ of the Act, which sets out those goods that cannot be subject to a TCO, the CEO must decide whether the application meets the core criteria.
Section 269C of the Act provides that a TCO application meets the core criteria if, on the day on which the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. Section 269B of the Act provides that ‘goods produced in Australia’ has the meaning given by section 269D, ‘ordinary course of business’ has the meaning given by section 269E and ‘substitutable goods’ in respect of goods the subject of a TCO application, means goods produced in Australia that are put, or are capable of being put, to a use that corresponds with a use (including a design use) to which the goods the subject of the application can be put.
Subsection 269P(3) of the Act provides that if the CEO is satisfied that a TCO application meets the core criteria, the CEO must make a written order (a TCO) declaring that the goods the subject of the TCO application are goods to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 (the Tariff) specified in the order applies.
Sunbeam applied for a TCO in respect of certain food storage plastic rolls on 27 May 2009.
Instrument
TCO No 0917926 was made on 21 August 2009. It declares that those certain food storage plastic rolls are goods to which item 50 of Schedule 4 to the Tariff applies since the CEO was satisfied that no substitutable goods were produced in Australia. The general rate of duty on these goods is 5%. The rate of duty for the goods subject to the TCO is free.
Consultation
Subsection 269K(1) of the Act provides in part that as soon as practicable after accepting a TCO application as a valid application, the CEO must publish a notice in the Gazette which includes an invitation to any person who considers that there are reasons why the TCO should not be made to lodge a submission with the CEO. The CEO did not receive any submissions in response to this invitation.
Commencement
Subsection 269S(1) relevantly provides that a TCO is to be taken to have come into force on the day on which the application for the TCO was lodged. TCO No. 0917926 is taken to have come into force on 27 May 2009.
The TCO does not affect the rights of a person (other than the Commonwealth) as at the date of registration so as to disadvantage that person or impose liabilities on a person (other than the Commonwealth) in respect of anything done or omitted to be done before the date of registration. The rights of importers will be beneficially affected. Under paragraph 126(1)(r) of the Regulations, importers of such goods will be able to apply for a refund of duty on goods imported since the day on which the TCO is taken to have come into force. The TCO does not impose any liabilities on any person.
Overview
The Customs Act 1901 was enacted to provide a framework for the administration of customs and excise duties, and includes provisions for Tariff Concession Orders (TCOs). The Tariff Concession Instrument No. 0917926 was introduced to address the specific need for tariff concessions on certain goods that are not produced in Australia and thus do not have local substitutes. This instrument was enacted by the Chief Executive Officer of Customs in accordance with the provisions of the Customs Act 1901. The policy objective underpinning this legislative action is to facilitate the import of goods that are not produced domestically by providing a lower rate of customs duty, thereby supporting trade and economic activities.
The instrument was issued following an application by Sunbeam for a TCO on certain food storage plastic rolls. The CEO of Customs was satisfied that no substitutable goods were produced in Australia, meeting the core criteria under section 269C of the Act. Consequently, the CEO issued TCO No. 0917926, which came into effect on 27 May 2009, the date the application was lodged. This concession effectively reduces the duty on these specific goods from the general rate of 5% to free, benefiting importers by potentially allowing them to claim refunds on duties paid on imports before the TCO's effective date.
Scope and Application
The Tariff Concession Instrument No. 0917926 under the Customs Act 1901 applies specifically to certain food storage plastic rolls, establishing a tariff concession order (TCO) that effectively grants a tariff-free status to these goods. The application of this TCO is contingent upon the Chief Executive Officer of Customs (CEO) determining that the goods are not substitutable by any goods produced in Australia in the ordinary course of business. This instrument facilitates the importation of these specific goods without the imposition of the general 5% duty rate, thereby benefiting importers who can apply for a refund of duty on such goods imported since the TCO came into force on 27 May 2009. The application process and the CEO's determination are governed by the provisions of Part XVA of the Customs Act 1901, with no submissions received against the TCO, ensuring that the instrument operates within the legislative framework without imposing any new liabilities on entities other than the Commonwealth.
Key Provisions
The key operative sections of the legislation (Customs Act 1901) are sections 269C, 269F, 269P, and 269SJ, among others. Section 269F allows an individual to apply to the Chief Executive Officer (CEO) of Customs for a Tariff Concession Order (TCO) for goods, provided these goods are not specified in section 269SJ. If the application meets the core criteria, which includes that no substitutable goods are produced in Australia on the day the application was lodged, the CEO must make a TCO (section 269P). Section 269C outlines the core criteria for making such an order. A TCO application is considered to meet these core criteria if it is established that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged.
The obligations imposed by the Act on the parties or entities it governs include the requirement for the CEO to make a decision on a TCO application in accordance with the criteria set out in section 269C. The CEO must also publish a notice in the Gazette inviting submissions from any person who may have an interest in the outcome of the application, as stipulated in section 269K(1). The CEO has an obligation to consider any submissions received and make a decision based on the evidence and arguments presented. Furthermore, the CEO must ensure that the TCO does not adversely affect the rights of any person as at the date of registration, and it must not impose any liabilities on any person in respect of anything done or omitted before the date of registration.
The legislation includes provisions for potential breaches and consequences. Although specific offences and penalties are not outlined in the Explanatory Statement, the Customs Act 1901 generally includes provisions for penalties and sanctions in case of non-compliance with the requirements of the Act or regulations made under it. Such penalties could include fines or imprisonment, depending on the nature and severity of the breach. It is important to note that the maximum penalties would be determined in accordance with the relevant sections of the Customs Act 1901 and any associated regulations. Any person found in breach of the Act could be subject to civil or criminal proceedings, with the specific consequences being dependent on the nature and extent of the breach.